Ｈｉｇｈ－Ｏｃｔａｎｅ　Ｄｉｓｃｕｓｓｉｏｎｓ Highville

　　“I am sure the nuclear power stations built by China will meet the standards in terms of safety requirements.”--Bob Hawke
　　On May 23, gas attendant Xiao Yang was amazed by the scene he had not seen in the more than two years he has worked at a gas station in Beijing’s Chaoyang District. At about 2 o’clock in the afternoon, hundreds of vehicles lined up to top up their petrol tanks. He was unaware then, but the same thing was taking place in all gas stations throughout Beijing.
　　The immediate trigger for this frenzied buying was a news broadcast that gasoline prices were due to rise the next day.
　　The hike was China’s second this year, increasing gasoline by 500 yuan per ton (by 58.75 yuan per barrel). But Zhang Guobao, Vice Chairman of the National Development and Reform Commission, pointed out that China’s oil prices even after the increase were still far below international ones.
　　The soaring international price of oil has pushed energy security to the top of the agenda for many countries. As a rapidly developing economy, as well as the world’s second-largest energy producer and consumer, China pays great attention to energy security. Scholars and officials from around the world were invited on May 24 to an international symposium to discuss the current energy security situation and the need for international cooperation.
　　The symposium, entitled “Energy Security: China and the World,” was co-sponsored by the China Institute for International Strategic Studies (CIISS) and the Michael Eric Bosman Hotung Foundation.
　　In his keynote speech at the opening ceremony of the symposium, CIISS Chairman Xiong Guangkai highlighted the importance of enhancing international cooperation on energy.
　　“Despite rivalries in tapping and exploiting overseas resources, the global energy-consuming nations, especially the developed countries and the emerging ones, share common interests in upholding the stability of the international market, tapping new energy sources, energy saving and environment protection,” said Xiong.
　　“International cooperation is in the interest of every country in the world,” said former Australian Prime Minister Bob Hawke, who attended the symposium.
　　“The high oil price in the international market is the major reason for the increase in domestic oil prices. China’s oil price should not remain at a low level against the backdrop of high international oil prices. Maybe in the future, the price of oil products in China will rise again,” said Xia Yishan, Research Fellow with the China Institute of International Studies.
　　The current oil supply and demand position in the international market is basically balanced, with supply exceeding demand marginally, he said. Daily oil production is 2 million barrels more than daily consumption of 85 million barrels. Xia also said global oil production and supply continue to climb and will peak in 2020.
　　However, owing to insufficient investments in oil refining facilities, regional conflicts and natural disasters such as hurricanes, there is a mismatch between supply and demand in some regions and during particular periods of time.
　　In 2004, China purchased 120 million tons of oil from the international market at a little more than $40 billion. In 2005, oil imports increased by only 2.4 percent, but expenditures increased by nearly $20 billion, almost reaching $60 billion. “China can easily buy oil from the international market now. But the main problem is the high price,” Xia said.
　　“China’s oil imports last year were 120 million tons while our oil production was more than 180 million tons. That is to say, more than 40 percent of our oil needs are met on the international market,” Vice President of China National Petroleum Corp. (CNPC) Zheng Hu told Beijing Review.
　　According to Zheng, CNPC mainly taps oil in China, but it also has interests in Sudan, Kazakhstan, Venezuela and some Southeast Asian countries. Last year, China’s overseas oil production exceeded 25 million tons and CNPC contributed more than 20 million tons.
　　“As an oil company, our vision is to cover the whole world. This is not only for the development of our company, but also for the energy security of the nation,” said Zheng.
　　In May, former Australian Prime Minister Bob Hawke came to China to participate in the international symposium entitled “Energy Security: China and the World.” After a day’s discussion at the symposium, he sat down with Beijing Review reporter Ni Yanshuo to share his views on international energy security.
　　Beijing Review: During Chinese Premier Wen Jiabao’s visit to Australia in April, our two countries signed a uranium cooperation framework agreement. How do you view China’s increase in nuclear energy utilization?
　　Bob Hawke: I think nuclear power is going to be increasingly important because of environmental considerations. The problems caused by coal-fired power stations are increasing environmental pollution. Nuclear power is significantly more environment-friendly. I think the decision of the Chinese Government to increase the number of nuclear power stations is a sensible one from the environmental point of view. We look forward to it bringing about sustainable development.
　　What are your views on the safety of utilizing nuclear energy given the tragedy at the Chernobyl power station in Ukraine?
　　This is in the negotiations between Australia and China, which guarantees that the uranium will be used for peaceful purposes. That is the basis totally accepted by both sides.
　　As to the safety of nuclear power stations, the Chernobyl station was very primitive and the technologies we use are much more sophisticated now. The nuclear power industry has had a very good safety record since then. I am sure the nuclear power stations built by China will meet the standards in terms of safety requirements.
　　
　　How do you view China’s increasing appetite for energy?
　　
　　China’s big appetite for energy reflects the fact that China’s high level of economic growth has averaged something like 9.5 percent since 1987. You probably don’t want to keep growth at that high level. I think the Chinese leadership is looking at a level of growth more in the region of 8 percent, but that is still very high. That level of growth is good for China itself and it is also good for this region. China has a trade deficit with the Asian region. This simply reflects the fact that countries in Asia are participants in China’s growth, supplying components and raw materials. So, China’s growth has been good for Asia and it is good for the rest of the world.
　　The Americans sometimes talk about the fact that China’s increasing demand for oil has played a role in the increasing price of oil. Now, it has had a part, but only a part because Americans have an enormous demand for oil too. But against whatever the impact on the increasing price of oil, you’ve got to remember that China has played a very significant role in reducing global inflation and depression by its amazing increase of exports of relatively cheap manufactured goods. It has been a deflationary factor for many countries in the world, including mine.
　　How do you view the security situation in some oil-producing areas such as the Middle East and Africa?
　　If you look at the Middle East, you’ve got the two countries of Iraq and Iran. There is uncertainty in Iraq with total instability characterizing that country. With Iran, there is still a big question mark about what is going to happen as the aggressive Americans push for a resolution. They are hoping to get a resolution under Chapter Seven of the UN Charter, which would impose sanctions and open the way to military actions. Fortunately, China, Russia and some of the European countries see the folly of opening the way to military actions against Iran because this would be a disaster.
　　My hope is that the good sense of the Chinese, Russians and Europeans will prevail and a resolution through diplomatic practices will enable Iran to have the right to use nuclear power for peaceful purposes and generate electricity with credible guarantees. I hope they won’t be devoted to the production of nuclear weapons.
　　As for Africa, some of the African countries have unstable situations and instability. If you look at Nigeria, there were the dissident groups recently attacking pipelines. I hope it will settle down soon.
　　Do you think international cooperation is very important to maintain energy security?
　　Obviously. It is in everyone’s interest. The search for security in energy supplies will not generate a source of conflict. I know the Chinese leadership does not want a situation where there can be conflict. I hope the United States will adopt a positive and constructive approach in this area.
　　The problem is, to some extent, the U.S. approach to this issue has been complicated. The waters have been muddied by the question of energy diplomacy and the question of the war against terror. I hope the Americans can understand that it is in everyone’s interests, their own included, that they move as soon as possible toward some forms of cooperation in regard to the legitimate pursuit by all countries of security of energy supplies.
　　It is interesting that one of the speakers [at the symposium] made a number of specific suggestions about how we might be able to move and create a framework for energy cooperation. He specifically referred to bringing China into the Group of Eight and looking into the possibility of creating a Northeast Asian security framework of the five parties involved in the six-party talks on the North Korean nuclear issue. Leaving out North Korea, the other five are of course Russia, Japan, China, South Korea and the United States. They are positive proposals, which, if carried through, could provide a basis for more cooperation in energy.
　　
　　How do you see the energy situation in the future?
　　
　　For many years in the future, we will still have a large demand for oil and coal. Gas plays a greater role now, and that is more environmentally acceptable.
　　In terms of other possible sources of energy, like wind power, solar and biomass, these are still to be developed. I think there should be as much cooperation as possible between the United States, China and Japan in particular. It might make a lot of sense to get as much cooperation as possible on putting resources, research resources and so on, into this, not only at the governmental ground, but also on the basis that the supply of traditional resources is not unlimited in the foreseeable future.
　　

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